Britain's top oil man, John Browne, warned yesterday that fear was driving the price of crude to artificially high levels, with untold consequences for the global economy.

The BP chief executive said turbulence in Iran, Iraq and Nigeria was leading to continual speculation about oil shortages and there were "all sorts of things that suggest it is getting worse".

Higher oil prices helped BP produce underlying profits of $5.3bn (£3bn) in the first quarter - up 7% - on sales of $67bn, but Lord Browne said global supply and demand for oil was moving towards balance. "I was at Doha at the weekend. Most (energy) people are not happy that the price of oil is so high because it is so unexpected and no one is quite clear what the impact will be," he said.

Other BP executives hinted that hedge funds and other speculators were partly responsible for the current record levels of $73 a barrel. Vivienne Cox, vice-president of supply and trading, said there had been a massive increase in the number of financial institutions trading in the oil markets. "Commodities have become a class of investment, which was not the case five years ago," she said.

The oil company privately fears that unusual periods of very high crude prices and huge profits will spark a public backlash and encourage politicians to slap on more taxes.

Tony Woodley, general secretary of the T&G union, led the attacks yesterday, saying BP should be made to cut fuel prices. "BP has banked another bonanza based on booming oil prices, but manufacturers, motorists and transport industries in the UK are being squeezed ... Multi-billion-pound records in the last few years mean BP can afford to act. The government should force the issue now," he said.

Lord Browne pointed out that BP's taxes had already risen this year to 35% and would rise to 39% as a new North Sea tax came into force after being announced by the chancellor last autumn.

But he was also quick to point out that shareholders - many of them British pension funds - would also benefit from BP's strong performance. The company now says it could distribute more than the planned $65bn bonanza of share buybacks and dividends over the next three years because crude prices have soared above its $60 per barrel reference rate.

BP said UK petrol, which is now over £1 a litre in some parts of the country, had provided only the smallest financial contribution, but it admitted North Sea oil and gas had been very profitable.

Lord Browne rejected suggestions that British gas consumers were paying for the company's financial success and hotly denied accusations that the company had not landed as much Liquefied Natural Gas as it could have done.

The company also came under fire from environmentalists at Friends of the Earth for not spending enough on safety.

"The oil spill in Alaska is just the latest incident to raise questions about BP's environmental standards, and there are concerns about the risk of leaks on the Baku Ceyhan pipeline [through Azerbaijan, Georgia and Turkey]," said corporate accountability campaigner Craig Bennett.

Meanwhile Lord Browne gave his strongest hint yet that he would be available for another major job when he reached the age of 60, the formal retirement age at BP.

"I have no time for the concept of retirement," he said. There has been endless speculation he could try to stay on at BP, but he strongly denied this.